2 Feb. Indices/Commodities weekly outlook by FX Charts

Equities ended a volatile Friday session with some substantial losses seen in the final hour of trade as investors erred on the side of caution after the downbeat GDP with one eye now looking towards the release this coming Friday of the US jobs data and NFP ( exp 5.6% , 230K ). A below par outcome will see stocks retreat further and with the dailies and the weeklies both looking heavy a test of the 200 DMA at 1972 and the 16 Dec low at 1968 would not surprise at some stage this week. Below their opens the chance to steeper losses towards 1950, although I suspect it would take a very poor NFP to get us there. We shall see. If we do get a bounce, then back above 2000 will see sellers lining up at 2005 (100 DMA) and then at 2020 (minor) and at the descending trend resistance at 2035. If seen keep a SL placed above 2050. Above here would retest 2060 (76.4% of 2088/1970), which is the major resistance, ahead of 2065/70 and then the all time high at 2088.50.

DJI

17103

As with the S+P, the DJI had a tough Friday, but pulled up just ahead of strong support at (17030). Below 17000 would open up the chance of seeing 16910 (50% of 16133/18048) and possibly 16640 (61.8%). A return to the topside, which looks less likely according to the longer term charts, would see a run towards the 100 DMA (17295) and then on towards 17400, but which if seen would appear to present another sell opportunity.

ASX SPI

5517

The SPI reached 5569 on Friday, just taking out the November 5565 high before turning lower in sympathy with the US markets to finish on its lows but still above 5500. The market seems to have pretty much priced in a rate cut at tomorrow’s RBA meeting, and the risk side would appear to be for a spike to the downside if they decide not to cut, although the weak Chinese manufacturing data over the weekend is unlikely to help the index today. In the meantime, the 100 HMA lies at 5500, below which would head towards the Fibo support at 5485 (23.6% of 5213/5569). Under here would see a steeper slide towards 5435/25 (38.2%/200 HMA). The topside target, above Friday’s 5569 high would be at 5602 (11 Sep high) and then at 5669 (3 Sept high), but which will need a rate cut to get it up there.

GOLD

1283

Gold recovered Thursday’s losses on Friday after holding on to the 1255 support, leaving the SL below 1250 unscathed, and now sits back in the middle of the recent range. I am pretty much undecided here and would tend to leave Gold alone for a while. All up, it looks to me as though we are in for more choppy trade over the next few sessions between 1255 support and 1310 resistance.

SILVER

17.21

Silver made a partial recovery on Friday, in unison with Gold, and with the 4 hour charts looking a bit more positive, we could be in for a squeeze back towards 17.50/80. While the dailies point lower, any near term rally would appear to be a sell opportunity for an eventual decline back towards the 100 DMA at 16.90 and then possibly towards rising trend support at 16.40.

OIL(WTI)

47.67

Oil prices soared by 8% on Friday for their biggest daily percentage gain in two and a half years, after news of a huge drop in U.S. rig counts, for the biggest fall in 30 years, as producers respond to oversupply. From here we are right back in the middle of the range that has contained trade for much of January and I think that we are going to be in for some more choppy action below 50, with support now seen at the daily Tenkan at 46.30. I prefer the idea of buying dips, with a SL below 45.00 but hoping for a more sustained test of the topside, with a break of 50 likely to see stops triggered for a move on towards the 15 Jan high at 51.25.